Government Intervenes in Lawsuits Against Health Management Associates Inc. Hospital Chain Alleging Unnecessary Inpatient Admissions and Payment of Kickbacks, by Department of Justice, Office of Public Affairs

The government has intervened in eight False Claims Act lawsuits against Health Management Associates Inc. (HMA) alleging that HMA billed federal health care programs for medically unnecessary inpatient admissions from the emergency departments at HMA hospitals and paid remuneration to physicians in exchange for patient referrals, the Justice Department announced today. The government also has joined in the allegations in one of these lawsuits that Gary Newsome, HMA’s former CEO, directed HMA’s corporate practice of pressuring emergency department physicians and hospital administrators to raise inpatient admission rates, regardless of medical necessity. HMA operates 71 hospitals in 15 states: Alabama, Arkansas, Florida, Georgia, Kentucky, Mississippi, Missouri, North Carolina, Oklahoma, Pennsylvania, South Carolina, Tennessee, Texas, Washington and West Virginia.

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The lawsuits allege that HMA’s corporate officers, at the direction of Newsome, exerted significant pressure on doctors in the emergency department to admit patients who could have been placed in observation, treated as outpatients or discharged, and that this resulted in the submission of inflated or false claims to federal health care programs. One lawsuit also alleges that patients were improperly admitted for scheduled surgical procedures that should have been done on an outpatient basis. The complaints further allege that HMA paid kickbacks, either in the form of bonuses or awarded contracts, to physician groups staffing HMA emergency rooms to induce the physicians to admit patients unnecessarily. . . . [Emphasis added.]